9
Site Selection and
Layout Planning
Section
9.1
Community and Site Selection
Section
9.2
Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Section Objectives
•
•
•
•
•
List the factors involved in deciding on a community in which to locate a
business.
Identify the factors to consider when selecting a business site.
Describe the resources that can be used in finding potential business
sites.
Explain the steps involved in analyzing potential sites for a business and
choosing between those sites.
Describe the advantages of starting a business at home or in an
incubator.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
The Main Idea
Selecting a community and selecting a specific location in which to
establish a business each involve a systematic process.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Content Vocabulary
economic base
incentive
census tract
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
trade area
industrial park
incubator
SECTION
9.1
Community and Site
Selection
Factors in Community Selection
Factors to consider when selecting a community include:
•
•
•
•
economic base
financial incentives
population makeup
labor supply
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Factors in Community Selection
As an entrepreneur, the decision of where to locate your new business is
an important one.
A location can determine who sees your business and how easily
customers can get to it.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Is the Economic Base Favorable?
First, you should determine
the community’s economic
base.
That base can be either
primarily industrial or
primarily service-oriented.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
economic base
the major industries that provide
employment in an area
SECTION
9.1
Community and Site
Selection
Are There Financial Incentives?
A community may try to
attract new businesses to
locate there by offering a
special incentive.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
incentive
a reward or advantage that helps
businesses, such as lower taxes,
cheaper land, or employee
training programs
SECTION
9.1
Community and Site
Selection
What Is the Makeup of the Population?
Trends such as aging populations or young families can affect
businesses.
These trends determine who will spend, how much they will spend,
and what types of products or services they will want.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
What Is the Makeup of the Population?
Demographics and population size can tell you if a location matches
your target market.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
What is the Makeup of the Population?
Access the Census
Bureau’s Census 2000 Web
site to research the
demographics of a census
tract that interests you.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
census tract
a small geographic area into
which a state or country is divided
for the purpose of gathering and
reporting census data
SECTION
9.1
Community and Site
Selection
Does the Labor Supply Match Your Needs?
When considering a community, consider your labor needs and how
well the local labor pool meets those needs.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Does the Labor Supply Match Your Needs?
Business owners need to consider:
•
•
•
how many employees they need
If the labor pool meets their needs
if the available pool has the appropriate skills
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Criteria for Site Selection
Once you determine that a community is suitable for your business,
you can begin looking at sites.
The factors to consider and the criteria used to judge sites vary with
the type of business activity.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Retail Business Considerations
Retail businesses need to
determine their trade area
in order to be accessible to
their target market.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
trade area
the region or section of the
community from which a business
draws customers
SECTION
9.1
Community and Site
Selection
Retail Business Considerations
Once you pinpoint a community you want to serve and determine
your business’s trade area, examine these issues:
•
•
•
•
number and size of competing businesses
nature of the competition
character of the area
accessibility and traffic
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Service/Wholesale Business Considerations
Service and wholesale businesses have similar needs to those of
retail businesses.
However, many service and wholesale businesses do not have
customers coming to their business sites and do not need expensive,
high-profile locations.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Manufacturing/Extraction Business Considerations
Manufacturing/extraction businesses need to be accessible to sources
of supply and transportation and are subject to local zoning laws.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Manufacturing/Extraction Business Considerations
An industrial park is
usually located close to
major transportation routes.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
industrial park
an area set aside in a community
for industrial use
SECTION
9.1
Community and Site
Selection
E-Business Considerations
Location and space are not major considerations for an e-business
because electronic business sites can be located almost anywhere and
require little space.
However, larger operations need more space for equipment, personnel,
and shipping.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Locating Potential Sites
There are a number of ways to locate potential business sites.
•
•
•
•
Read the classified sections of newspapers.
Consult with realtors who specialize in business properties.
Conduct visual surveys by driving through prospective
communities.
Network with personal or business contacts.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Site Analysis and Decision Making
Once an entrepreneur identifies possible sites for a business, he or
she must consider three things before making a decision:
•
•
•
the surrounding area
the building
the costs of buying, building, or leasing
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Surrounding Area Analysis
Surrounding areas should be evaluated by the same criteria used for
site selection:
•
•
•
•
number and size of competing businesses
nature of the competition
character of the area
accessibility and traffic
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Building Evaluation
The building must be large enough to take care of present needs and to
allow for expansion.
Check the building’s interior to see how it meets your needs and the
exterior’s construction, soundness, appearance, and parking.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
Lease, Buy, or Build?
Leasing Advantages
No large
cash
outlay
Reduced
risk
Tax
deductibl
e lease
expenses
25
SECTION
9.1
Community and Site
Selection
Making Your Decision
For each of the possible sites, compare these variables:
•
•
•
cost
advantages and disadvantages
desirability
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
Alternative Sites
Two sites that do not fit the
traditional mold are the
home-based business and
the incubator.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
incubator
an enterprise that is set up to
provide flexible and affordable
leases, office space, equipment,
management assistance,
mentoring assistance, and
access to financing for new
businesses
SECTION
9.1
Community and Site
Selection
After You Read
1.
List the factors involved in deciding on a community in which to
locate a business.
Factors to consider include the community’s economic base,
financial incentives, population makeup, and labor supply.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
After You Read
2.
Identify the factors to consider when selecting a business site.
Factors to consider when selecting a business site vary with the
type of business. For example, a retail store needs to be accessible
to customers; an extraction business must be near the product it is
extracting.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
After You Read
3.
Describe the resources that can be used in finding potential
business sites.
A number of resources can be used to find potential business sites:
newspapers, realtors, the Internet, visual surveys, and personal or
business contacts.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
After You Read
4.
Explain the steps involved in analyzing potential sites for a
business and choosing between those sites.
An analysis of potential business sites needs to be done in three
areas: Surrounding area analysis is based on site area
considerations for the type of business. Building evaluation
includes both the interior and exterior. Deciding whether to lease,
buy, or build involves analyzing the three options for the site.
Choosing between the sites would involve a comparison on the
basis of cost, advantages and disadvantages, and desirability.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.1
Community and Site
Selection
After You Read
5.
Describe the advantages of starting a business at home or in
an incubator.
The main advantage of starting a business at home is financial, due
to lower rent and taxes. Advantages of starting a business in an
incubator are lower rent, shared secretarial and administrative
services, and the availability of business development services.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Section Objectives
•
•
•
List the steps in layout planning that are common to all businesses.
Describe the layout needs for each type of business.
Summarize the final details of layout planning.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
The Main Idea
The steps in layout planning apply to all types of businesses.
In contrast, development of a facility layout is based on the operational
needs of the business.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Content Vocabulary
layout
workstation
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
façade
appointments
SECTION
9.2
Layout Planning
Physical Layout
A well-planned layout can
mean a more efficient
operation, a more appealing
sales floor, and greater
customer convenience.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
layout
a floor plan or map that shows
the interior and exterior
arrangement of a business,
including such items as display
cases, lighting fixtures, traffic
patterns, landscaping, and
parking spaces
Physical Layout
Six Steps in Layout Planning
1
Define the objectives of the facility.
2
Identify the primary and supporting activities that will take place.
3
Determine access, arrangement, and flow among the activities.
4
Determine space requirements for all activities.
5
Design alternative layouts for the facility.
6
Evaluate the various layouts and choose one.
37
SECTION
9.2
Layout Planning
Layout Needs and Possibilities
Although the steps in layout planning are the same for all businesses,
the options and considerations are not.
Different types of businesses have different operational needs.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
Manufacturing Businesses
production
processes
space
requirements
production
sequence
Layout
Considerations for
Manufacturing
Businesses
environmental
needs
materials
flow
control
39
Manufacturing Businesses
Types of Manufacturing Layouts
product
layout
fixed-product
layout
process
layout
40
SECTION
9.2
Layout Planning
Manufacturing Businesses
In a product layout, all
machines and supporting
activities are arranged
along a product flow line.
As products come down the
line, something is done to
them at each workstation.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
workstation
an area in a business with
equipment for a single worker
Retail Businesses
products to
be sold
aisle
exposure
projected
clientele
Retail Layout
Considerations
product
coordination
sales per
square foot
of selling
space
sales value of
area within
store
42
SECTION
9.2
Layout Planning
Wholesale Businesses
When planning the layout of a wholesale business, storage and
space utilization are the most important considerations.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Wholesale Businesses
When planning for storage, follow these guidelines:
•
•
•
•
•
Store popular items near shipping points.
Store items together that were received together and will be
shipped together.
Provide a wide variety of storage space.
Assign storage space on the basis of handling ease and popularity.
Plan entrances, exits, and aisles so products can be easily
reached.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Wholesale Businesses
Most wholesale businesses are located in single-story buildings, which
makes controlling and moving stock easy.
Receiving, storage, order assembly, and shipping areas should be
arranged so goods can be moved through them quickly and easily.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Service Businesses
The physical layout of a service business depends largely on the
specific service it provides.
There is no prescribed set of guidelines or patterns for these
enterprises.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Extraction Businesses
Like service businesses, extraction firms have unique layouts.
They share a few common features: an office area, storage areas for
equipment and supplies, and the extraction business site itself.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
E-Businesses
The layout of an e-business depends on its site and its operations.
If the e-business ships products, storage and shipping areas are
needed.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Finishing Touches
Once a business owner
chooses a particular layout,
he or she can begin
planning the finishing
touches.
Such details include
planning interior design
features, as well as
alterations or improvements
to the facade.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
facade
the face or front of a building
SECTION
9.2
Layout Planning
Planning for Office Space
You have two options to consider when planning office space:
open office layout: best if cost, space, employee supervision, or
access to files and equipment are important
closed office layout: best if privacy and noise reduction are of
primary concern
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
Planning for Office Space
You can define the traffic
patterns of an office space
with appointments.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
appointments
the furniture, equipment, and
accessories contained in a
building
SECTION
9.2
Layout Planning
After You Read
1.
List the steps in layout planning that are common to all
businesses.
(1) Define the objectives of the facility. (2) Identify the primary and
supporting activities that will take place in the facility. (3) Determine
the interrelationship—access, arrangement, and flow—between
activities. (4) Determine the space requirements for all activities. (5)
Design alternative layouts for the facility. (6) Evaluate the various
layouts and choose one.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
After You Read
2.
Describe the layout needs for each type of business.
Layout needs differ for each type of business. Considerations for
manufacturing, retail, wholesale, service, and extraction businesses
and for e-businesses are described in the second section of the
chapter.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
SECTION
9.2
Layout Planning
After You Read
3.
Discuss the final details of layout planning.
Final details of layout planning include determining office space
and space for equipment, furnishings, and supplies as well as
planning for interior design features and alterations or
improvements to the face of the building.
Chapter 9 Site Selection and Layout Planning
Glencoe Entrepreneurship: Building a Business
9
Site Selection and
Layout Planning
End of
Chapter 9
Section
9.1
Selection and
Community and SiteSite
Selection
Layout Planning
Section
9.2
Layout Planning
Glencoe Entrepreneurship: Building a Business